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Published - 17 October 2025 - 5 min read

Traceability Meets Privacy: How Blockchain Can Unlock Circular Economy Potential

The world is going through a transition towards a more circular economy. This shift relies on transparent and reliable data sharing across supply chains. Blockchain can be the perfect tool for immutable, transparent, and reliable data sharing, unlocking the full potential of the circular economy.

From raw material extraction to repair and recycling, companies must be able to trace products and verify sustainability claims. This level of transparency ensures accountability, but transparency alone is not enough. Businesses and consumers must also trust that sensitive data remains secure.

This balance between traceability and privacy is one of the most pressing challenges in today’s sustainability landscape. Batteries highlight this issue more than most sectors. Their supply chains stretch across continents, and the materials they rely on, such as lithium, cobalt, and nickel, carry significant environmental, social, and geopolitical concerns.

With new EU regulations setting high standards for reporting, the ability to share essential data while protecting commercial information has become vital.

As mentioned, Blockchain offers a promising solution. It creates secure and immutable records that can be verified across a decentralised network. This allows companies to prove sustainability claims without revealing every detail of their supply chain. By combining accountability with data protection, blockchain is emerging as a key enabler of circular economy systems.

Blockchain’s Role in Balancing Traceability and Privacy

Blockchain technology is designed to guarantee data integrity and prevent tampering, making it well-suited to complex and global value chains. In the battery industry, it can track every stage of the lifecycle, from extraction and production to reuse and recycling, while also protecting commercially sensitive information through cryptographic methods such as zero-knowledge proofs.

This means regulators and consumers can verify data like carbon footprint disclosures, recycling rates, or sourcing practices without gaining access to confidential trade secrets. For businesses, it reduces the fear that compliance will expose competitive strategies.

As the EU Battery Regulation comes into force, requiring Digital Battery Passports for all batteries sold on the European market, blockchain-enabled solutions can provide the backbone of compliance. By safeguarding privacy and ensuring trust in shared data, the technology supports both regulatory requirements and competitiveness.

Enhancing Circular Economy Practices with Blockchain

A circular economy depends on accurate information about product design, material composition, and end-of-life options. Without reliable data, it is impossible to design products for reuse, ensure ethical sourcing, or recover valuable materials efficiently. Blockchain-based traceability provides a way to address these gaps.

For example, companies can demonstrate that critical raw materials such as cobalt or lithium have been sourced responsibly. Lifecycle assessments also become more precise, as blockchain systems capture real-time data across the entire value chain rather than relying on estimates. This makes it easier to measure carbon footprints and identify where improvements can be made.

Consumers benefit as well. With access to verified information about recyclability or second-life applications, they can make better-informed purchasing decisions and build trust in sustainability claims. In this way, blockchain not only enforces compliance with EU regulations but also strengthens confidence in circular practices.

Addressing Privacy Concerns in Global Supply Chains

One of the major barriers to greater transparency is the fear of exposing sensitive information. Manufacturers may hesitate to disclose supplier networks, cost structures, or production processes. Blockchain reduces these risks by allowing selective data sharing. Businesses can control which information is made public while still proving compliance with regulatory and sustainability requirements.

This approach is especially important in international trade. Batteries often cross multiple borders before reaching end-users. With blockchain-enabled verification, authorities can check compliance with EU rules without requiring companies to reveal their entire supply chain. This helps reduce trade frictions while encouraging higher environmental and social standards worldwide.

For producers outside Europe, aligning with Digital Battery Passport requirements can also provide an opportunity. By upgrading systems and meeting EU expectations, they gain smoother access to one of the world’s largest markets while strengthening their sustainability profile.

The BASE Project: Pioneering Digital Battery Passports

In Europe, the BASE project is demonstrating how blockchain can bring both traceability and privacy to life through the Digital Battery Passport (DBP). Our work focuses on building a trusted and interoperable framework that connects lifecycle data, circularity indicators, and carbon footprint metrics into a single secure system.

By embedding blockchain into this framework, BASE ensures that data remains accurate, verifiable, and tamper-proof while protecting sensitive business information. This approach gives manufacturers the confidence to share sustainability data without revealing competitive strategies. It also helps regulators and consumers trust that the information they access is authentic and compliant with the EU Battery Regulation.

Equally important, BASE brings stakeholders together across the battery value chain—from raw material suppliers and manufacturers to recyclers and policymakers. These collaborations demonstrate how transparency and privacy can coexist, setting a benchmark for implementation not only in Europe but also for global supply chains.

Looking Ahead: Blockchain as a Driver of Sustainable Trust

The success of the circular economy depends on both accountability and trust. Blockchain-enabled digital passports provide a pathway to achieving this balance. They allow companies to comply with regulations, protect proprietary information, and empower consumers with reliable data.

As global supply chains become increasingly interconnected, these systems will be vital to meeting environmental goals while supporting competitiveness and innovation. The BASE project’s work shows how blockchain can transform sustainability ambitions into measurable outcomes, with Europe leading the way in setting standards for the future.

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